Natural Resource and Environmental Economics

Transcription

1 Natural Resource and Environmental Economics Fall Semester, 2013 Lecturer: Towa Tachibana Classes: Tuesday, 08:50 10:20 Room: Seminar Room I Office Hours: Tuesdays 10:30 11:20, 12:30 14:00 Room A514, Integrated Research Buildings (A Block) Changes in Office Hours will be posted on my website. Course Description This course intends to cover the major topics in graduate-level Natural Resource and Environmental Economics. Please refer to the syllabus for the details of course design. The lectures are given in English. In this course, we will have fifteen lectures. The class starts on October 1 and ends January, 2014 (not yet checked ). Please find below the topics and the reading lists for each lecture. In the text, for concise exposition, I show the materials only by the name of the author(s) and the year of publication: e.g., Coase (1960). The details of the referred papers are gathered in the references at the end of this document. During the semester, depending on the progress of lectures, the topics and the reading lists will be gradually filled out with some revisions. There are two types of readings: required readings and supplementary materials. I try to choose journal articles for required readings. Most of the lectures are devoted to explain the logic and the main results of the required readings. Before the lecture, the attendants MUST have read the required readings. All the required readings I refer to are in the library. You can pick them up in the stack room, and photocopy them. Many recent papers can be downloaded from the website of the library ( However, please keep in mind that NOT ALL the journal articles have been digitized. 1 1 You may suspect that I am joking, but every year a few students come to tell me We cannot download a (or several) required reading. My answer is Please go to the library and photocopy it. 1

2 As supplementary materials, we often refer to the following two textbooks: Hanley, Shogren, and White (2007) and Perman et al. (2003). Both are the standard graduate-level textbooks of natural resource and environmental economics. For those who plan to major in this field, it may be a good idea to purchase both of them. van Kooten and Bulte (2000) is a good graduatelevel textbook with the emphasis on biological resource management. For those who are not familiar with the topics in natural resource and environmental economics, the following two undergraduate textbooks will provide excellent introduction: Keohane and Olmstead (2007);? All the subjects in economics are based on the analytical tools of micro and macroeconomics. Our subject, natural resource and environmental economics, is not an exception. It extensively utilizes the tools of, in particular, microeconomics. If you have not yet been confident with (who can be?) the concepts and tools of microeconomics, you may find Varian (2006) very helpful for preparing this course. Please also refer to the textbooks listed in the syllabus. Lecture 9: January 7 Dynamic Optimization IV: Transversality Conditions No required reading. This lecture tries to cover a remaining important issue in the Maximum Principle: Transversality condition. First, we review the Kuhn-Tucker Conditions, then derive the transversality conditions in the framework of dynamic optimization. Ig you are not familiar with the Kuhn-Tucker condition, please read Chiang (1984, Ch.21). Incidentally, the 4th edition of Chiang was published some years ago. My explanation is based in a Japanese textbook: Nishimura (1990, Ch.2). Lecture 6: December 10 Dynamic Optimization I: Lagrange Multiplier Method and Maximum Principle In the framework of the Ramsey growth model, we will study the Lagrange method for dy- 2

3 namic optimization (Chow 1997, Ch.2). Then we derive Maximum Principle from the Lagrange solution. My explanation is based on Dixit (1990, Ch.10). The Ramsey growth model is the starting point of the modern macroeconomics, and most of the graduate macro textbooks start from the Ramsey model (Romer 2011, Blanchard and Fischer 1989, Ch.2). Required Readings Please download and overview the three handouts listed in this Website. Please solve the questions in Two-period Problem. Lecture 5: December 3 How to Deal with Externalities Part 2: Introduction to Dynamic Optimization No required reading in this lecture. If possible, please read Nalebuff (1997). But quite unfortunately, the book in which this article is included is not available in the library of Chiba University. Although I requested the library to purchase it and put it in an open-stack room, I do not think it will come before December 3. I will lay out the basic structure of dynamic optimization problems based on Nalebuff (1997). Then we proceed to study the Maximum Principle based on Dixit (1990). There is a flood of good textbooks on the methods of dynamic optimization. If possible, check Kamien and Schwartz (1991), Luenberger (1979), etc. 3

4 References Blanchard, Oliver Jean and Stanley Fischer Lectures on Macroeconomics. Cambridge, Massachusetts: MIT Press. Chiang, Alpha C Fundamental Methods of Mathematical Economics. New York: McGraw-Hill, 3 ed. Chow, Gregory C Dynamic Economics. New York: Oxford University Press. Coase, Ronald H The Problem of Social Cost. Journal of Law and Economics 3:1 44. Dixit, Avinash K Optimization in Economic Theory. Oxford: Oxford University Press, 2 ed. Hanley, Nick, Jason F. Shogren, and Ben White Environmental Economics in Theory and Practice. Basingstoke: Palgrave Macmillan, 2 ed. Kamien, Morton I. and Nancy L. Schwartz Dynamic Optimization: The Calculus of Variations and Optimal Control in Economics and Management. New York: Elsevier Science Publishing Co., 2 ed. Keohane, Nathaniel O. and Shelia M. Olmstead Markets and the Environment. Washington, DC: Island Press. Luenberger, David G Introduction to Dynamic Systems: Theory, Models, and Applications. New York: John Wiley & Sons. Nalebuff, Barry On a Clear Day, You Can See the Coase Theorem. In The Environment and Emerging Development Issues Vol. I, edited by Partha Dasgupta and Karl-Göran Mäler. Oxford: Clarendon Press, Nishimura, Kiyohiko KEIZAIGAKU NO TAMENO SAITEKIKA RIRON NYUMON [Introduction to Methods of Optimization in Economics]. Tokyo: Tokyo Daigaku Shiyupankai (University of Tokyo Press). 4

5 Perman, Roger, Yue Ma, James McGilvray, and Michael Common Natural Resource and Environmental Economics. Harlow: Essex: Pearson Education Limited, 3 ed. Romer, David Advanced Macroeconomics. New York: McGraw-Hill, 4 ed. van Kooten, G. Cornelis and Erwin H. Bulte The Economics of Nature. Malden, Massachusetts: Basil Blackwell. Varian, Hal R Intermediate Microeconomics. New York: W. W. Norton & Company, 7 ed. 5